Kingdom remains South Korea’s top oil supplier after Iran sanctions
Saudi Arabia remains the largest crude supplier for South Korea in the absence of Iranian oil shipments, according to customs data.
South Korea’s oil imports from Iran were halted after the US re-imposed sanctions against the Islamic republic in May.
The statistics, released by the Korea National Oil Corporation, show that South Korea bought a total of 209,316 barrels for the first eight months of this year, representing a 7.4 percent increase from a year earlier.
The US has seen an increase in its oil supply to South Korea. The data shows South Korea imported 51 percent more crude from the US.
In July, Seoul’s crude shipments from the US, in particular, almost tripled to 14,782 barrels from the year before.
As a result, the US became South Korea’s second-largest crude oil supplier, overtaking Kuwait for the first time. Over the past eight months, South Korea has imported a total of 86,069 barrels, with the price tag of nearly $5.7 billion.
South Korea’s crude imports from Kazakhstan jumped by 39 percent from the previous year, followed by the UAE, Kuwait and Saudi Arabia. Oil imports from the UAE increased by 33.7 percent, and Kuwait by 13.8 percent. South Korean oil refiners have been struggling to find alternative sources of condensate supply. Previously, the Iranian ultra-light oil was favored most by South Korean refiners as a raw material for making petrochemical products.
Before US sanctions were re-imposed, South Korea was the biggest buyer of Iranian condensate with a rich yield of naphtha. Hanwha Total Petrochemical is the first South Korean refiner to diversify its source of condensate out of Iran.
According to the company spokesman, the petrochemical firm has ordered 500,000 barrels of condensate from Saudi Arabia. “The Saudi Arabian condensate was delivered in August, and this is our efforts to diversify the sources of condensate imports,” the spokesman said, asking not to be named.
Hanwha Total operates a condensate splitter at its factory in South Chungcheong Province to deal with 180,000 barrels of condensate a day, he added. Earlier, the company said it would increase imports of condensate from Australia and Russia.
Other refiners such as SK Innovation were not immediately available for comment.
In an effort to help local refiners find alternative oil supplies, the South Korean government plans to extend freight rebates for shipments of non-Middle East crude to the end of 2021, according to the Ministry of Trade, Industry and Energy.